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| [ Engrossed ] | [ Senate Amendment 001 ] |
91_SB0217
LRB9101218KSgc
1 AN ACT concerning motor vehicles.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Vehicle Code is amended by
5 changing Sections 5-100, 5-401.2, 5-402, 5-402.1, and 5-403.1
6 and adding Section 5-101.1 as follows:
7 (625 ILCS 5/5-100) (from Ch. 95 1/2, par. 5-100)
8 Sec. 5-100. Definitions. For the purposes of this
9 Chapter, the following words shall have the meanings ascribed
10 to them as follows:
11 "Additional place of business" means a place owned or
12 leased and occupied by the dealer in addition to its
13 established place of business, at which the dealer conducts
14 or intends to conduct business on a permanent or long term
15 basis. The term does not include an area where an off site
16 sale or exhibition is conducted. The Secretary of State
17 shall adopt guidelines for the administration and enforcement
18 of this definition by rule.
19 "Display exhibition" means a temporary display of
20 vehicles by a dealer licensed under Section 5-101 or 5-102,
21 at a location at which no vehicles are offered for sale, that
22 is conducted at a place other than the dealer's established
23 and additional places of business.
24 "Established place of business" means the place owned or
25 leased and occupied by any person duly licensed or required
26 to be licensed as a dealer for the purpose of engaging in
27 selling, buying, bartering, displaying, exchanging or dealing
28 in, on consignment or otherwise, vehicles and their essential
29 parts and for such other ancillary purposes as may be
30 permitted by the Secretary by rule. It shall include an
31 office in which the dealer's records shall be separate and
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1 distinct from any other business or tenant which may occupy
2 space in the same building except as provided in Section
3 5-101.1. This office shall not be located in a house
4 trailer, residence, tent, temporary stand, temporary address,
5 room or rooms in a hotel or rooming house, nor the premises
6 occupied by a single or multiple unit residence. The
7 established place of business of a scrap processor shall be
8 the fixed location where the scrap processor maintains its
9 principal place of business. The Secretary of State shall,
10 by rule and regulation, adopt guidelines for the
11 administration and enforcement of this definition, such as,
12 but not limited to issues concerning the required hours of
13 operation, describing where vehicles are displayed and
14 offered for sale, where books and records are maintained and
15 requirements for the fulfillment of warranties. A dealer may
16 have an additional place of business as defined under this
17 Section.
18 "Motor vehicle financing affiliate" means a business
19 organization registered to do business in Illinois that,
20 pursuant to a written contract with either (1) a single new
21 or used motor vehicle dealer or (2) a single group of new or
22 used motor vehicle dealers that share a common ownership
23 within the group, purchases new or used motor vehicles on
24 behalf of the dealer or group of dealers and then sells,
25 transfers, or assigns those motor vehicles to the dealer or
26 group of dealers. The motor vehicle financing affiliate must
27 be incorporated or organized solely to purchase new or used
28 vehicles on behalf of the new or used motor vehicle dealer or
29 group of dealers with which it has contracted, shall not sell
30 motor vehicles at retail, shall perform only those business
31 functions related to the purchasing of motor vehicles and
32 selling, transferring, or assigning those motor vehicles to
33 the dealer or group of dealers. The motor vehicle financing
34 affiliate must be license under the provisions of Section
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1 5-101.1 and must not be licensed as a new or used motor
2 vehicle dealer.
3 "Off site sale" means the temporary display and sale of
4 vehicles, for a period of not more than 7 calendar days
5 (excluding Sundays), by a dealer licensed under Section 5-101
6 or 5-102 at a place other than the dealer's established and
7 additional places of business.
8 "Relevant market area", for a new vehicle dealer licensed
9 under Section 5-101 and for a used vehicle dealer licensed
10 under Section 5-102, means the area within 10 miles of the
11 established or additional place of business of the dealer
12 located in a county with a population of 300,000 or more, or
13 within 15 miles if the established place of business is
14 located in a county with a population of less than 300,000.
15 "Trade show exhibition" means a temporary display of
16 vehicles, by dealers licensed under Section 5-101 or 5-102,
17 or any other person as defined in subsection (c) of Section
18 5-102.1, at a location at which no vehicles are offered for
19 sale that is conducted at a place other than the dealer's
20 established and additional places of business. In order for
21 a display exhibition to be considered a trade show
22 exhibition, it must be participated in by at least 3 dealers,
23 2 of which must be licensed under Section 5-101 or 5-102; and
24 a trade show exhibition of new vehicles shall only be
25 participated in by licensed new vehicle dealers at least 2 of
26 which must be licensed under Section 5-101.
27 (Source: P.A. 89-235, eff. 8-4-95; 90-89, eff. 1-1-98.)
28 (625 ILCS 5/5-101.1 new)
29 Sec. 5-101.1. Motor vehicle financing affiliates;
30 licensing.
31 (a) In this State no business shall engage in the
32 business of a motor vehicle financing affiliate without a
33 license to do so in writing from the Secretary of State.
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1 (b) An application for a motor vehicle financing
2 affiliate's license must be filed with the Secretary of
3 State, duly verified by oath, on a form prescribed by the
4 Secretary of State and shall contain all of the following:
5 (1) The name and type of business organization of
6 the applicant and the applicant's established place of
7 business and any additional places of business in this
8 State.
9 (2) The name and address of the licensed new or
10 used vehicle dealer to which the applicant will be
11 selling, transferring, or assigning new or used motor
12 vehicles pursuant to a written contract. If more than
13 one dealer is on the application, the applicant shall
14 state in writing the basis of common ownership among the
15 dealers.
16 (3) A list of the business organization's officers,
17 directors, members, and shareholders having a 10% or
18 greater ownership interest in the business, providing the
19 residential address for each person listed.
20 (4) If selling, transferring, or assigning new
21 motor vehicles, the make or makes of new vehicles that it
22 will sell, assign, or otherwise transfer to the
23 contracting new motor vehicle dealer listed on the
24 application pursuant to paragraph (2).
25 (5) The name of each manufacturer or franchised
26 distributor, if any, of new vehicles with whom the
27 applicant has contracted for the sale of new vehicles and
28 a signed statement from each manufacturer or franchised
29 distributor acknowledging the contract.
30 (6) A statement that the applicant has been
31 approved for registration under the Retailers' Occupation
32 Tax Act by the Department of Revenue. This requirement
33 does not apply to a motor vehicle financing affiliate
34 that is already licensed with the Secretary of State and
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1 is applying for a renewal of its license.
2 (7) A statement that the applicant has complied
3 with the appropriate liability insurance requirement and
4 a Certificate of Insurance that shall not expired before
5 December 31 of the year for which the license was issued
6 or renewed with a minimum liability coverage of $100,000
7 for the bodily injury or death of any person, $300,000
8 for the bodily injury or death of 2 or more persons in
9 any one accident, and $50,000 for damage to property.
10 The expiration of the insurance policy shall not
11 terminate the liability under the policy arising during
12 the period for which the policy was filed. Trailer and
13 mobile home dealers are exempt from the requirements of
14 this paragraph. A motor vehicle financing affiliate is
15 exempt from the requirements of this paragraph if it is
16 covered by the insurance policy of the new or used dealer
17 listed on the application pursuant to paragraph (2).
18 (8) A license fee of $1,000 for the applicant's
19 established place of business and $250 for each
20 additional place of business, if any, to which the
21 application pertains. However, if the application is made
22 after June 15 of any year, the license fee shall be $500
23 for the applicant's established place of business and
24 $125 for each additional place of business, if any, to
25 which the application pertains. These license fees shall
26 be returnable only in the event that the application is
27 denied by the Secretary of State
28 (9) A statement incorporating the requirements of
29 paragraphs 8 and 9 of subsection (b) of Section 5-101.
30 (10) Any other information concerning the business
31 of the applicant as the Secretary of State may prescribe.
32 (11) A statement that the applicant understands
33 Chapter 1 through Chapter 5 of this Code.
34 (c) Any change which renders no longer accurate any
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1 information contained in any application for a motor vehicle
2 financing affiliate's license shall be amended within 30 days
3 after the occurrence of the change on a form prescribed by
4 the Secretary of State, accompanied by an amendatory fee of
5 $2.
6 (d) If a new vehicle dealer is not listed on the
7 application, pursuant to paragraph (2) of subsection (b), the
8 motor vehicle financing affiliate shall not receive, possess,
9 or transfer any new vehicle. If a new motor vehicle dealer
10 is listed on the application, pursuant to paragraph (2) of
11 subsection (b), the new motor vehicle dealer can only receive
12 those new cars it is permitted to receive under its franchise
13 agreement. If both a new and used motor vehicle dealer are
14 listed on the application, pursuant to paragraph (2) of
15 subsection (b) only the new motor vehicle dealer may receive
16 new motor vehicles. If a used motor vehicle is listed on the
17 application, pursuant to paragraph (2) of subsection (b),
18 the used motor vehicle dealer shall not receive any new motor
19 vehicles.
20 (e) The applicant and dealer provided pursuant to
21 paragraph (2) of subsection (b) must be business
22 organizations registered to conduct business in Illinois.
23 Three-fourths of the dealer's board of directors must be
24 members of the motor vehicle financing affiliate's board of
25 directors, if applicable.
26 (f) Unless otherwise provide in this Chapter 5, no
27 business organization registered to do business in Illinois
28 shall be licensed as a motor vehicle financing affiliate
29 unless:
30 (1) The motor vehicle financing affiliate shall
31 only sell, transfer, or assign motor vehicles to the
32 licensed new or used dealer listed on the application
33 pursuant to paragraph (2) of subsection (b).
34 (2) The motor vehicle financing affiliate sells,
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1 transfers, or assigns to the new motor vehicle dealer
2 listed on the application, if any, only those new motor
3 vehicles the motor vehicle financing affiliate has
4 received under the contract set forth in paragraph (5) of
5 subsection (b).
6 (3) Any new vehicle dealer listed pursuant to
7 paragraph (2) of subsection (b) has a franchise agreement
8 that permits the dealer to receive motor vehicles from
9 the motor vehicle franchise affiliate.
10 (4) The new or used motor vehicle dealer listed on
11 the application pursuant to paragraph (2) of subsection
12 (b) has one established place of business or supplemental
13 places of business as referenced in subsection (g).
14 (g) The Secretary of State shall, within a reasonable
15 time after receipt, examine an application submitted pursuant
16 to this Section and, unless it is determined that the
17 application does not conform with the requirements of this
18 Section or that grounds exist for a denial of the application
19 under Section 5-501, grant the applicant a motor vehicle
20 financing affiliate license in writing for the applicant's
21 established place of business and a supplemental license in
22 writing for each additional place of business in a form
23 prescribe by the Secretary, which shall include all of the:
24 (1) The name of the business licensed;
25 (2) The name and address of its officers,
26 directors, or members, as applicable;
27 (3) In the case of an original license, the
28 established place of business of the licensee; and
29 (4) If applicable, the make or makes of new
30 vehicles which the licensee is licensed to sell to the
31 new motor vehicle dealer listed on the application
32 pursuant to paragraph (2) of subsection (b).
33 (h) The appropriate instrument evidencing the license or
34 a certified copy, provided by the Secretary of State, shall
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1 be kept posted conspicuously in the established place of
2 business of the licensee.
3 (i) Except as provided in subsection (h), all motor
4 vehicle financing affiliate's licenses granted under this
5 Section shall expired by operation of law on December 31 of
6 the calendar year for which they are granted, unless revoked
7 or canceled at an earlier date pursuant to Section 5-501.
8 (j) A motor vehicle financing affiliate's license may be
9 renewed upon application and payment of the required fee.
10 However, when an application for renewal of a motor vehicle
11 financing affiliate's license is made during the month of
12 December, the effective license shall remain in force until
13 the application is granted or denied by the Secretary of
14 State.
15 (k) The contract a motor vehicle financing affiliate has
16 with a manufacturer or franchised distributor, as provided in
17 paragraph (5) of subsection (b), shall only permit the
18 applicant to sell, transfer, or assign new motor vehicles to
19 the new motor vehicle dealer listed on the application
20 pursuant to paragraph (2) of subsection (b). The contract
21 shall specifically prohibit the motor vehicle financing
22 affiliate from selling motor vehicles at retail. This
23 contract shall not be considered the granting of a franchise
24 as a defined in Section 2 of the Motor Vehicle Franchise Act.
25 (l) When purchasing of a motor vehicle by a new or used
26 motor vehicle dealer, all persons license as a motor vehicle
27 financing affiliate are required to furnish all of the
28 following:
29 (1) For a new vehicle, a manufacturer's statement
30 of origin properly assigned to the purchasing dealer.
31 For a used vehicle, a certificate of title properly
32 assigned to the purchasing dealer.
33 (2) A statement verified under oath that all
34 identifying numbers on the vehicle agree with those on
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1 the certificate of title or manufacturer's statement of
2 origin.
3 (3) A bill of sale properly executed on behalf of
4 the purchasing dealer.
5 (4) A copy of the Uniform Invoice-transaction
6 report pursuant to Section 5-402.
7 (5) In the case of a rebuilt vehicle, a copy of the
8 Disclosure of Rebuilt Vehicle Status pursuant to Section
9 5-104.3.
10 (6) In the case of a vehicle for which a warranty
11 has been reinstated, a copy of the warranty.
12 (m) The motor vehicle financing affiliate shall use the
13 established and supplemental place or places of business the
14 new or used vehicle dealer listed on the application pursuant
15 to paragraph (2) of subsection (b) as its established and
16 supplemental place or places of business.
17 (n) The motor vehicle financing affiliate shall keep all
18 books and records required by this Code with the books and
19 records of the new or used vehicle dealer listed on the
20 application pursuant to paragraph (2) of subsection (b). The
21 motor vehicle financing affiliate may use the books and
22 records of the new or used motor vehicle dealer listed on the
23 application pursuant to paragraph (2) of subsection (b).
24 (o) Under no circumstances shall a motor vehicle
25 financing affiliate sell, transfer, or assign a new vehicle
26 to any place of business of a new motor vehicle dealer,
27 unless that place of business is licensed under this Chapter
28 to sell, assign, or otherwise transfer the make of the new
29 motor vehicle transferred.
30 (p) All moneys received by the Secretary of State as
31 license fees under this Section shall be deposited into the
32 Motor Vehicle Review Board Fund and shall be used to
33 administer the Motor Vehicle Review Board under the Motor
34 Vehicle Franchise Act.
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1 (q) Except as otherwise provided in this Section, a
2 motor vehicle financing affiliate shall comply with all
3 provision of this Code.
4 (625 ILCS 5/5-401.2) (from Ch. 95 1/2, par. 5-401.2)
5 Sec. 5-401.2. Licensees required to keep records and
6 make inspections.
7 (a) Every person licensed or required to be licensed
8 under Section 5-101, 5-101.1, 5-102, 5-301 or 5-302 of this
9 Code, shall, with the exception of scrap processors, maintain
10 for 3 years, in a form as the Secretary of State may by rule
11 or regulation prescribe, at his established place of
12 business, additional place of business, or principal place of
13 business if licensed under Section 5-302, the following
14 records relating to the acquisition or disposition of
15 vehicles and their essential parts possessed in this State,
16 brought into this State from another state, territory or
17 country, or sold or transferred to another person in this
18 State or in another state, territory, or country.
19 (1) the following records pertaining to new or used
20 vehicles shall be kept:
21 (A) the year, make, model, style and color of
22 the vehicle;
23 (B) the vehicle's manufacturer's
24 identification number or, if applicable, the
25 Secretary of State or Illinois Department of State
26 Police identification number;
27 (C) the date of acquisition of the vehicle;
28 (D) the name and address of the person from
29 whom the vehicle was acquired and, if that person is
30 a dealer, the Illinois or out-of-state dealer
31 license number of such person;
32 (E) the signature of the person making the
33 inspection of a used vehicle as required under
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1 subsection (d) of this Section, if applicable;
2 (F) the purchase price of the vehicle, if
3 applicable;
4 (G) the date of the disposition of the
5 vehicle;
6 (H) the name and address of the person to whom
7 any vehicle was disposed, and if that person is a
8 dealer, the Illinois or out-of-State dealer's
9 license number of that dealer;
10 (I) the uniform invoice number reflecting the
11 disposition of the vehicle, if applicable; and
12 (J) The sale price of the vehicle, if
13 applicable.
14 (2) (A) the following records pertaining to used
15 essential parts other than quarter panels and transmissions
16 of vehicles of the first division shall be kept:
17 (i) the year, make, model, color and type
18 of such part;
19 (ii) the vehicle's manufacturer's
20 identification number, derivative number, or,
21 if applicable, the Secretary of State or
22 Illinois Department of State Police
23 identification number of such part;
24 (iii) the date of the acquisition of each
25 part;
26 (iv) the name and address of the person
27 from whom the part was acquired and, if that
28 person is a dealer, the Illinois or
29 out-of-state dealer license number of such
30 person; if the essential part being acquired is
31 from a person other than a dealer, the licensee
32 shall verify and record that person's identity
33 by recording the identification numbers from at
34 least two sources of identification, one of
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1 which shall be a drivers license or State
2 identification card;
3 (v) the uniform invoice number or
4 out-of-state bill of sale number reflecting the
5 acquisition of such part;
6 (vi) the stock number assigned to the
7 essential part by the licensee, if applicable;
8 (vii) the date of the disposition of such
9 part;
10 (viii) the name and address of the person
11 to whom such part was disposed of and, if that
12 person is a dealer, the Illinois or
13 out-of-state dealer license number of that
14 person;
15 (ix) the uniform invoice number
16 reflecting the disposition of such part.
17 (B) Inspections of all essential parts shall be
18 conducted in accordance with Section 5-402.1.
19 (C) A separate entry containing all of the
20 information required to be recorded in subparagraph (A)
21 of paragraph (2) of subsection (a) of this Section shall
22 be made for each separate essential part. Separate
23 entries shall be made regardless of whether the part was
24 a large purchase acquisition. In addition, a separate
25 entry shall be made for each part acquired for immediate
26 sale or transfer, or for placement into the overall
27 inventory or stock to be disposed of at a later time, or
28 for use on a vehicle to be materially altered by the
29 licensee, or acquired for any other purpose or reason.
30 Failure to make a separate entry for each essential part
31 acquired or disposed of, or a failure to record any of
32 the specific information required to be recorded
33 concerning the acquisition or disposition of each
34 essential part as set forth in subparagraph (A) of
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1 paragraph (2) of subsection (a) shall constitute a
2 failure to keep records.
3 (D) The vehicle's manufacturer's identification
4 number or Secretary of State or Illinois Department of
5 State Police identification number for the essential part
6 shall be ascertained and recorded even if such part is
7 acquired from a person or dealer located in a State,
8 territory, or country which does not require that such
9 information be recorded. If the vehicle's manufacturer's
10 identification number or Secretary of State or Illinois
11 Department of State Police identification number for an
12 essential part cannot be obtained, that part shall not be
13 acquired by the licensee or any of his agents or
14 employees. If such part or parts were physically acquired
15 by the licensee or any of his agents or employees while
16 the licensee or agent or employee was outside this State,
17 that licensee or agent or employee was outside the State,
18 that licensee, agent or employee shall not bring such
19 essential part into this State or cause it to be brought
20 into this State. The acquisition or disposition of an
21 essential part by a licensee without the recording of the
22 vehicle identification number or Secretary of State
23 identification number for such part or the transportation
24 into the State by the licensee or his agent or employee
25 of such part or parts shall constitute a failure to keep
26 records.
27 (E) The records of essential parts required to be
28 kept by this Section shall apply to all hulks, chassis,
29 frames or cowls, regardless of the age of those essential
30 parts. The records required to be kept by this Section
31 for essential parts other than hulks, chassis, frames or
32 cowls, shall apply only to those essential parts which
33 are 6 model years of age or newer. In determining the
34 model year of such an essential part it may be presumed
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1 that the identification number of the vehicle from which
2 the essential part came or the identification number
3 affixed to the essential part itself acquired by the
4 licensee denotes the model year of that essential part.
5 This presumption, however, shall not apply if the gross
6 appearance of the essential part does not correspond to
7 the year, make or model of either the identification
8 number of the vehicle from which the essential part is
9 alleged to have come or the identification number which
10 is affixed to the essential part itself. To determine
11 whether an essential part is 6 years of age or newer
12 within this paragraph, the model year of the essential
13 part shall be subtracted from the calendar year in which
14 the essential part is acquired or disposed of by the
15 licensee. If the remainder is 6 or less, the record of
16 the acquisition or disposition of that essential part
17 shall be kept as required by this Section.
18 (F) The requirements of paragraph (2) of subsection
19 (a) of this Section shall not apply to the disposition of
20 an essential part other than a cowl which has been
21 damaged or altered to a state in which it can no longer
22 be returned to a usable condition and which is being sold
23 or transferred to a scrap processor or for delivery to a
24 scrap processor.
25 (3) the following records for vehicles on which junking
26 certificates are obtained shall be kept:
27 (A) the year, make, model, style and color of
28 the vehicle;
29 (B) the vehicle's manufacturer's
30 identification number or, if applicable, the
31 Secretary of State or Illinois Department of State
32 Police identification number;
33 (C) the date the vehicle was acquired;
34 (D) the name and address of the person from
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1 whom the vehicle was acquired and, if that person is
2 a dealer, the Illinois or out-of-state dealer
3 license number of that person;
4 (E) the certificate of title number or salvage
5 certificate number for the vehicle, if applicable;
6 (F) the junking certificate number obtained by
7 the licensee; this entry shall be recorded at the
8 close of business of the second business day after
9 receiving the junking certificate;
10 (G) the name and address of the person to whom
11 the junking certificate has been assigned, if
12 applicable, and if that person is a dealer, the
13 Illinois or out-of-state dealer license number of
14 that dealer;
15 (H) if the vehicle or any part of the vehicle
16 is dismantled for its parts to be disposed of in any
17 way, or if such parts are to be used by the licensee
18 to materially alter a vehicle, those essential parts
19 shall be recorded in the record book for essential
20 parts and the entries required by paragraph (2) of
21 subsection (a) shall be made.
22 (4) the following records for rebuilt vehicles shall be
23 kept:
24 (A) the year, make, model, style and color of
25 the vehicle;
26 (B) the vehicle's manufacturer's
27 identification number of the vehicle or, if
28 applicable, the Secretary of State or Illinois
29 Department of State Police identification number;
30 (C) the date the vehicle was acquired;
31 (D) the name and address of the person from
32 whom the vehicle was acquired, and if that person is
33 a dealer, the Illinois or out-of-state dealer
34 license number of that person;
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1 (E) the salvage certificate number for the
2 vehicle;
3 (F) the newly issued certificate of title
4 number for the vehicle;
5 (G) the date of disposition of the vehicle;
6 (H) the name and address of the person to whom
7 the vehicle was disposed, and if a dealer, the
8 Illinois or out-of-state dealer license number of
9 that dealer;
10 (I) The sale price of the vehicle.
11 (b) A failure to make separate entries for each vehicle
12 acquired, disposed of, or assigned, or a failure to record
13 any of the specific information required to be recorded
14 concerning the acquisition or disposition of each vehicle as
15 set forth in paragraphs (1), (3) and (4) of subsection (a)
16 shall constitute a failure to keep records.
17 (c) All entries relating to the acquisition of a vehicle
18 or essential part required by subsection (a) of this Section
19 shall be recorded no later than the close of business on the
20 seventh calendar day following such acquisition. All entries
21 relating to the disposition of a vehicle or an essential part
22 shall be made at the time of such disposition. If the
23 vehicle or essential part was disposed of on the same day as
24 its acquisition or the day thereafter, the entries relating
25 to the acquisition of the vehicle or essential part shall be
26 made at the time of the disposition of the vehicle or
27 essential part. Failure to make the entries required in or at
28 the times prescribed by this subsection following the
29 acquisition or disposition of such vehicle or essential part
30 shall constitute a failure to keep records.
31 (d) Every person licensed or required to be licensed
32 shall, before accepting delivery of a used vehicle, inspect
33 the vehicle to determine whether the manufacturer's public
34 vehicle identification number has been defaced, destroyed,
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1 falsified, removed, altered, or tampered with in any way. If
2 the person making the inspection determines that the
3 manufacturer's public vehicle identification number has been
4 altered, removed, defaced, destroyed, falsified or tampered
5 with he shall not acquire that vehicle but instead shall
6 promptly notify law enforcement authorities of his finding.
7 (e) The information required to be kept in subsection
8 (a) of this Section shall be kept in a manner prescribed by
9 rule or regulation of the Secretary of State.
10 (f) Every person licensed or required to be licensed
11 shall have in his possession a separate certificate of title,
12 salvage certificate, junking certificate, certificate of
13 purchase, uniform invoice, out-of-state bill of sale or other
14 acceptable documentary evidence of his right to the
15 possession of every vehicle or essential part.
16 (g) Every person licensed or required to be licensed as
17 a transporter under Section 5-201 shall maintain for 3 years,
18 in such form as the Secretary of State may by rule or
19 regulation prescribe, at his principal place of business a
20 record of every vehicle transported by him, including numbers
21 of or other marks of identification thereof, the names and
22 addresses of persons from whom and to whom the vehicle was
23 delivered and the dates of delivery.
24 (h) No later than 15 days prior to going out of
25 business, selling the business, or transferring the ownership
26 of the business, the licensee shall notify the Secretary of
27 State that he is going out of business or that he is
28 transferring the ownership of the business. Failure to notify
29 under this paragraph shall constitute a failure to keep
30 records.
31 (i) Any person who knowingly fails to keep the records
32 required by this Section or who knowingly violates this
33 Section shall be guilty of a Class 2 felony. Each violation
34 shall constitute a separate and distinct offense and a
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1 separate count may be brought in the same indictment or
2 information for each vehicle or each essential part of a
3 vehicle for which a record was not kept as required by this
4 Section.
5 (Source: P.A. 89-189, eff. 1-1-96; 89-235, eff. 8-4-95.)
6 (625 ILCS 5/5-402) (from Ch. 95 1/2, par. 5-402)
7 Sec. 5-402. Use of Department of Revenue Uniform Invoice
8 for vehicle. Every person licensed as a new vehicle dealer,
9 or as a used vehicle dealer, or as a motor vehicle financing
10 affiliate shall issue a Uniform Invoice with respect to each
11 transaction wherein he disposes of a vehicle, except that
12 where, in the same transaction, a vehicle dealer transfers
13 more than one vehicle to another vehicle dealer for the
14 purpose of resale, such seller for resale may issue one
15 Uniform Invoice to the purchaser covering all the vehicles
16 involved in that transaction and may report the transfer of
17 all the vehicles involved in that transaction to the
18 Department on the same Uniform Invoice-transaction reporting
19 return form. Every person licensed as a rebuilder shall
20 likewise issue a Uniform Invoice with respect to each
21 transaction wherein he disposes of a rebuilt or restored
22 vehicle. Such Uniform Invoice shall be the same document as
23 the transaction reporting return referred to in Section 3 of
24 the Retailers' Occupation Tax Act. Such Uniform Invoice shall
25 contain complete financial details of the transaction in such
26 form as shall be prescribed by the Department of Revenue.
27 Such Uniform Invoice shall include an affidavit by both the
28 seller and the buyer that any trade-in title has been
29 properly assigned from the buyer to the seller and that all
30 information on the Uniform Invoice-transaction reporting
31 return is true and accurate.
32 (Source: P.A. 85-1396.)
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1 (625 ILCS 5/5-402.1) (from Ch. 95 1/2, par. 5-402.1)
2 Sec. 5-402.1. Use of Secretary of State Uniform Invoice
3 for Essential Parts.
4 (a) Except for scrap processors, every person licensed
5 or required to be licensed under Section 5-101, 5-101.1,
6 5-102 or 5-301 of this Code shall issue, in a form the
7 Secretary of State may by rule or regulation prescribe, a
8 Uniform Invoice, which may also act as a bill of sale, made
9 out in triplicate with respect to each transaction in which
10 he disposes of an essential part other than quarter panels
11 and transmissions of vehicles of the first division. Such
12 Invoice shall be made out at the time of the disposition of
13 the essential part. If the licensee disposes of several
14 essential parts in the same transaction, the licensee may
15 issue one Uniform Invoice covering all essential parts
16 disposed of in that transaction.
17 (b) The following information shall be contained on the
18 Uniform Invoice:
19 (1) the business name, address and dealer license
20 number of the person disposing of the essential part;
21 (2) the name and address of the person acquiring
22 the essential part, and if that person is a dealer, the
23 Illinois or out-of-state dealer license number of that
24 dealer;
25 (3) the date of the disposition of the essential
26 part;
27 (4) the year, make, model, color and description of
28 each essential part disposed of by the person;
29 (5) the manufacturer's vehicle identification
30 number, Secretary of State identification number or
31 Illinois Department of State Police identification
32 number, for each essential part disposed of by the
33 person;
34 (6) the printed name and legible signature of the
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1 person or agent disposing of the essential part; and
2 (7) if the person is a dealer the printed name and
3 legible signature of the dealer or his agent or employee
4 accepting delivery of the essential part.
5 (c) Except for scrap processors, and except as set forth
6 in subsection (d) of this Section, whenever a person licensed
7 or required to be licensed by Section 5-101, 5-101.1, 5-102,
8 or 5-301 accepts delivery of an essential part, other than
9 quarter panels and transmissions of vehicles of the first
10 division, that person shall, at the time of the acceptance or
11 delivery, comply with the following procedures:
12 (1) Before acquiring or accepting delivery of any
13 essential part, the licensee or his authorized agent or
14 employee shall inspect the part to determine whether the
15 vehicle identification number, Secretary of State
16 identification number, Illinois Department of State
17 Police identification number, or identification plate or
18 sticker attached to or stamped on any part being acquired
19 or delivered has been removed, falsified, altered,
20 defaced, destroyed, or tampered with. If the licensee or
21 his agent or employee determines that the vehicle
22 identification number, Secretary of State identification
23 number, Illinois Department of State Police
24 identification number, identification plate or
25 identification sticker containing an identification
26 number, or Federal Certificate label of an essential part
27 has been removed, falsified, altered, defaced, destroyed
28 or tampered with, the licensee or agent shall not accept
29 or receive that part.
30 If that part was physically acquired by or delivered
31 to a licensee or his agent or employee while that
32 licensee, agent or employee was outside this State, that
33 licensee or agent or employee shall not bring that
34 essential part into this State or cause it to be brought
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1 into this State.
2 (2) If the person disposing of or delivering the
3 essential part to the licensee is a licensed in-state or
4 out-of-state dealer, the licensee or his agent or
5 employee, after inspecting the essential part as required
6 by paragraph (1) of this subsection (c), shall examine
7 the Uniform Invoice, or bill of sale, as the case may be,
8 to ensure that it contains all the information required
9 to be provided by persons disposing of essential parts as
10 set forth in subsection (b) of this Section. If the
11 Uniform Invoice or bill of sale does not contain all the
12 information required to be listed by subsection (b) of
13 this Section, the dealer disposing of or delivering such
14 part or his agent or employee shall record such
15 additional information or other needed modifications on
16 the Uniform Invoice or bill of sale or, if needed, an
17 attachment thereto. The dealer or his agent or employee
18 delivering the essential part shall initial all additions
19 or modifications to the Uniform Invoice or bill of sale
20 and legibly print his name at the bottom of each document
21 containing his initials. If the transaction involves a
22 bill of sale rather than a Uniform Invoice, the licensee
23 or his agent or employee accepting delivery of or
24 acquiring the essential part shall affix his printed name
25 and legible signature on the space on the bill of sale
26 provided for his signature or, if no space is provided,
27 on the back of the bill of sale. If the dealer or his
28 agent or employee disposing of or delivering the
29 essential part cannot or does not provide all the
30 information required by subsection (b) of this Section,
31 the licensee or his agent or employee shall not accept or
32 receive any essential part for which that required
33 information is not provided. If such essential part for
34 which the information required is not fully provided was
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1 physically acquired while the licensee or his agent or
2 employee was outside this State, the licensee or his
3 agent or employee shall not bring that essential part
4 into this State or cause it to be brought into this
5 State.
6 (3) If the person disposing of the essential part
7 is not a licensed dealer, the licensee or his agent or
8 employee shall, after inspecting the essential part as
9 required by paragraph (1) of subsection (c) of this
10 Section verify the identity of the person disposing of
11 the essential part by examining 2 sources of
12 identification, one of which shall be either a driver's
13 license or state identification card. The licensee or
14 his agent or employee shall then prepare a Uniform
15 Invoice listing all the information required to be
16 provided by subsection (b) of this Section. In the space
17 on the Uniform Invoice provided for the dealer license
18 number of the person disposing of the part, the licensee
19 or his agent or employee shall list the numbers taken
20 from the documents of identification provided by the
21 person disposing of the part. The person disposing of
22 the part shall affix his printed name and legible
23 signature on the space on the Uniform Invoice provided
24 for the person disposing of the essential part and the
25 licensee or his agent or employee acquiring the part
26 shall affix his printed name and legible signature on the
27 space provided on the Uniform Invoice for the person
28 acquiring the essential part. If the person disposing of
29 the essential part cannot or does not provide all the
30 information required to be provided by this paragraph, or
31 does not present 2 satisfactory forms of identification,
32 the licensee or his agent or employee shall not acquire
33 that essential part.
34 (d) If an essential part other than quarter panels and
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1 transmissions of vehicles of the first division was delivered
2 by a licensed commercial delivery service delivering such
3 part on behalf of a licensed dealer, the person required to
4 comply with subsection (c) of this Section may conduct the
5 inspection of that part required by paragraph (1) of
6 subsection (c) and examination of the Uniform Invoice or bill
7 of sale required by paragraph (2) of subsection (c) of this
8 Section immediately after the acceptance of the part.
9 (1) If the inspection of the essential part
10 pursuant to paragraph (1) of subsection (c) reveals that
11 the vehicle identification number, Secretary of State
12 identification number, Illinois Department of State
13 Police identification number, identification plate or
14 sticker containing an identification number, or Federal
15 Certificate label of an essential part has been removed,
16 falsified, altered, defaced, destroyed or tampered with,
17 the licensee or his agent shall immediately record such
18 fact on the Uniform Invoice or bill of sale, assign the
19 part an inventory or stock number, place such inventory
20 or stock number on both the essential part and the
21 Uniform Invoice or bill of sale, and record the date of
22 the inspection of the part on the Uniform Invoice or bill
23 of sale. The licensee shall, within 7 days of such
24 inspection, return such part to the dealer from whom it
25 was acquired.
26 (2) If the examination of the Uniform Invoice or
27 bill of sale pursuant to paragraph (2) of subsection (c)
28 reveals that any of the information required to be listed
29 by subsection (b) of this Section is missing, the
30 licensee or person required to be licensed shall
31 immediately assign a stock or inventory number to such
32 part, place such stock or inventory number on both the
33 essential part and the Uniform Invoice or bill of sale,
34 and record the date of examination on the Uniform Invoice
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1 or bill of sale. The licensee or person required to be
2 licensed shall acquire the information missing from the
3 Uniform Invoice or bill of sale within 7 days of the
4 examination of such Uniform Invoice or bill of sale.
5 Such information may be received by telephone
6 conversation with the dealer from whom the part was
7 acquired. If the dealer provides the missing information
8 the licensee shall record such information on the Uniform
9 Invoice or bill of sale along with the name of the person
10 providing the information. If the dealer does not
11 provide the required information within the
12 aforementioned 7 day period, the licensee shall return
13 the part to that dealer.
14 (e) Except for scrap processors, all persons licensed or
15 required to be licensed who acquire or dispose of essential
16 parts other than quarter panels and transmissions of vehicles
17 of the first division shall retain a copy of the Uniform
18 Invoice required to be made by subsections (a), (b) and (c)
19 of this Section for a period of 3 years.
20 (f) Except for scrap processors, any person licensed or
21 required to be licensed under Sections 5-101, 5-102 or 5-301
22 who knowingly fails to record on a Uniform Invoice any of the
23 information or entries required to be recorded by subsections
24 (a), (b) and (c) of this Section, or who knowingly places
25 false entries or other misleading information on such Uniform
26 Invoice, or who knowingly fails to retain for 3 years a copy
27 of a Uniform Invoice reflecting transactions required to be
28 recorded by subsections (a), (b) and (c) of this Section, or
29 who knowingly acquires or disposes of essential parts without
30 receiving, issuing, or executing a Uniform Invoice reflecting
31 that transaction as required by subsections (a), (b) and (c)
32 of this Section, or who brings or causes to be brought into
33 this State essential parts for which the information required
34 to be recorded on a Uniform Invoice is not recorded as
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1 prohibited by subsection (c) of this Section, or who
2 knowingly fails to comply with the provisions of this Section
3 in any other manner shall be guilty of a Class 2 felony.
4 Each violation shall constitute a separate and distinct
5 offense and a separate count may be brought in the same
6 indictment or information for each essential part for which a
7 record was not kept as required by this Section or for which
8 the person failed to comply with other provisions of this
9 Section.
10 (g) The records required to be kept by this Section may
11 be examined by a person or persons making a lawful inspection
12 of the licensee's premises pursuant to Section 5-403.
13 (h) The records required to be kept by this Section
14 shall be retained by the licensee at his principal place of
15 business for a period of 7 years.
16 (i) The requirements of this Section shall not apply to
17 the disposition of an essential part other than a cowl which
18 has been damaged or altered to a state in which it can no
19 longer be returned to a usable condition and which is being
20 sold or transferred to a scrap processor or for delivery to a
21 scrap processor.
22 (Source: P.A. 85-1204; 85-1396; 85-1440; 86-1179; 86-1209;
23 86-1475.)
24 (625 ILCS 5/5-403.1) (from Ch. 95 1/2, par. 5-403.1)
25 Sec. 5-403.1. Inventory System.
26 (a) Every person licensed or required to be licensed
27 under the provisions of Sections 5-101, 5-101.1, 5-102 and
28 5-301 of this Code shall, under rule and regulation
29 prescribed by the Secretary of State, maintain an inventory
30 system of all vehicles or essential parts in such a manner
31 that a person making an inspection pursuant to the provisions
32 of Section 5-403 of this Code can readily ascertain the
33 identity of such vehicles or essential parts and readily
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1 locate such parts on the licensees premises.
2 (b) Failure to maintain an inventory system as required
3 under this Section is a Class A misdemeanor.
4 (c) This Section does not apply to vehicles or essential
5 parts which have been acquired by a scrap processor for
6 processing into a form other than a vehicle or essential
7 part.
8 (Source: P.A. 86-1209.)
9 Section 10. The Motor Vehicle Franchise Act is amended
10 by changing Section 4 and adding Section 3.1 as follows:
11 (815 ILCS 710/3.1 new)
12 Sec. 3.1. Motor vehicle financing affiliate. For
13 purposes of this Act, a franchisee and a motor vehicle
14 financing affiliate, as defined in Section 5-100 of the
15 Illinois Vehicle Code, shall be treated as a single entity.
16 That a franchisee arranges to receive motor vehicles through
17 a motor vehicle financing affiliate shall not exempt a
18 manufacturer from the provisions of this Act. A manufacturer
19 shall not require, directly or indirectly, a motor vehicle
20 dealer to contract with a motor vehicle financing affiliate
21 in order to receive its motor vehicles nor shall a
22 manufacturer prevent, directly or indirectly, a motor vehicle
23 dealer from contracting with a motor vehicle financing
24 affiliate in order to receive its motor vehicles. A
25 manufacturer shall not use a motor vehicle financing
26 affiliate as a means of avoiding the provisions and
27 requirements of this Act.
28 (815 ILCS 710/4) (from Ch. 121 1/2, par. 754)
29 Sec. 4. Unfair competition and practices.
30 (a) The unfair methods of competition and unfair and
31 deceptive acts or practices listed in this Section are hereby
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1 declared to be unlawful. In construing the provisions of this
2 Section, the courts may be guided by the interpretations of
3 the Federal Trade Commission Act (15 U.S.C. 45 et seq.), as
4 from time to time amended.
5 (b) It shall be deemed a violation for any manufacturer,
6 factory branch, factory representative, distributor or
7 wholesaler, distributor branch, distributor representative or
8 motor vehicle dealer to engage in any action with respect to
9 a franchise which is arbitrary, in bad faith or
10 unconscionable and which causes damage to any of the parties
11 or to the public.
12 (c) It shall be deemed a violation for a manufacturer, a
13 distributor, a wholesaler, a distributor branch or division,
14 a factory branch or division, or a wholesale branch or
15 division, or officer, agent or other representative thereof,
16 to coerce, or attempt to coerce, any motor vehicle dealer:
17 (1) to accept, buy or order any motor vehicle or
18 vehicles, appliances, equipment, parts or accessories
19 therefor, or any other commodity or commodities or
20 service or services which such motor vehicle dealer has
21 not voluntarily ordered or requested except items
22 required by applicable local, state or federal law; or to
23 require a motor vehicle dealer to accept, buy, order or
24 purchase such items in order to obtain any motor vehicle
25 or vehicles or any other commodity or commodities which
26 have been ordered or requested by such motor vehicle
27 dealer;
28 (2) to order or accept delivery of any motor
29 vehicle with special features, appliances, accessories or
30 equipment not included in the list price of the motor
31 vehicles as publicly advertised by the manufacturer
32 thereof, except items required by applicable law; or
33 (3) to order for anyone any parts, accessories,
34 equipment, machinery, tools, appliances or any commodity
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1 whatsoever, except items required by applicable law.
2 (d) It shall be deemed a violation for a manufacturer, a
3 distributor, a wholesaler, a distributor branch or division,
4 or officer, agent or other representative thereof:
5 (1) to adopt, change, establish or implement a plan
6 or system for the allocation and distribution of new
7 motor vehicles to motor vehicle dealers which is
8 arbitrary or capricious or to modify an existing plan so
9 as to cause the same to be arbitrary or capricious;
10 (2) to fail or refuse to advise or disclose to any
11 motor vehicle dealer having a franchise or selling
12 agreement, upon written request therefor, the basis upon
13 which new motor vehicles of the same line make are
14 allocated or distributed to motor vehicle dealers in the
15 State and the basis upon which the current allocation or
16 distribution is being made or will be made to such motor
17 vehicle dealer;
18 (3) to refuse to deliver in reasonable quantities
19 and within a reasonable time after receipt of dealer's
20 order, to any motor vehicle dealer having a franchise or
21 selling agreement for the retail sale of new motor
22 vehicles sold or distributed by such manufacturer,
23 distributor, wholesaler, distributor branch or division,
24 factory branch or division or wholesale branch or
25 division, any such motor vehicles as are covered by such
26 franchise or selling agreement specifically publicly
27 advertised in the State by such manufacturer,
28 distributor, wholesaler, distributor branch or division,
29 factory branch or division, or wholesale branch or
30 division to be available for immediate delivery.
31 However, the failure to deliver any motor vehicle shall
32 not be considered a violation of this Act if such failure
33 is due to an act of God, a work stoppage or delay due to
34 a strike or labor difficulty, a shortage of materials, a
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1 lack of manufacturing capacity, a freight embargo or
2 other cause over which the manufacturer, distributor, or
3 wholesaler, or any agent thereof has no control;
4 (4) to coerce, or attempt to coerce, any motor
5 vehicle dealer to enter into any agreement with such
6 manufacturer, distributor, wholesaler, distributor branch
7 or division, factory branch or division, or wholesale
8 branch or division, or officer, agent or other
9 representative thereof, or to do any other act
10 prejudicial to the dealer by threatening to reduce his
11 allocation of motor vehicles or cancel any franchise or
12 any selling agreement existing between such manufacturer,
13 distributor, wholesaler, distributor branch or division,
14 or factory branch or division, or wholesale branch or
15 division, and the dealer. However, notice in good faith
16 to any motor vehicle dealer of the dealer's violation of
17 any terms or provisions of such franchise or selling
18 agreement or of any law or regulation applicable to the
19 conduct of a motor vehicle dealer shall not constitute a
20 violation of this Act;
21 (5) to require a franchisee to participate in an
22 advertising campaign or contest or any promotional
23 campaign, or to purchase or lease any promotional
24 materials, training materials, show room or other display
25 decorations or materials at the expense of the
26 franchisee;
27 (6) to cancel or terminate the franchise or selling
28 agreement of a motor vehicle dealer without good cause
29 and without giving notice as hereinafter provided; to
30 fail or refuse to extend the franchise or selling
31 agreement of a motor vehicle dealer upon its expiration
32 without good cause and without giving notice as
33 hereinafter provided; or, to offer a renewal, replacement
34 or succeeding franchise or selling agreement containing
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1 terms and provisions the effect of which is to
2 substantially change or modify the sales and service
3 obligations or capital requirements of the motor vehicle
4 dealer arbitrarily and without good cause and without
5 giving notice as hereinafter provided notwithstanding any
6 term or provision of a franchise or selling agreement.
7 (A) If a manufacturer, distributor,
8 wholesaler, distributor branch or division, factory
9 branch or division or wholesale branch or division
10 intends to cancel or terminate a franchise or
11 selling agreement or intends not to extend or renew
12 a franchise or selling agreement on its expiration,
13 it shall send a letter by certified mail, return
14 receipt requested, to the affected franchisee at
15 least 60 days before the effective date of the
16 proposed action, or not later than 10 days before
17 the proposed action when the reason for the action
18 is based upon either of the following:
19 (i) the business operations of the
20 franchisee have been abandoned or the
21 franchisee has failed to conduct customary
22 sales and service operations during customary
23 business hours for at least 7 consecutive
24 business days unless such closing is due to an
25 act of God, strike or labor difficulty or other
26 cause over which the franchisee has no control;
27 or
28 (ii) the conviction of or plea of nolo
29 contendere by the motor vehicle dealer or any
30 operator thereof in a court of competent
31 jurisdiction to an offense punishable by
32 imprisonment for more than two years.
33 Each notice of proposed action shall include a
34 detailed statement setting forth the specific
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1 grounds for the proposed cancellation, termination,
2 or refusal to extend or renew.
3 (B) If a manufacturer, distributor,
4 wholesaler, distributor branch or division, factory
5 branch or division or wholesale branch or division
6 intends to change substantially or modify the sales
7 and service obligations or capital requirements of a
8 motor vehicle dealer as a condition to extending or
9 renewing the existing franchise or selling agreement
10 of such motor vehicle dealer, it shall send a letter
11 by certified mail, return receipt requested, to the
12 affected franchisee at least 60 days before the
13 date of expiration of the franchise or selling
14 agreement. Each notice of proposed action shall
15 include a detailed statement setting forth the
16 specific grounds for the proposed action.
17 (C) Within 15 days from receipt of the notice
18 under subparagraphs (A) and (B), the franchisee may
19 file with the Board a written protest against the
20 proposed action.
21 When the protest has been timely filed, the
22 Board shall enter an order, fixing a date (within 60
23 days of the date of the order), time, and place of a
24 hearing on the protest required under Sections 12
25 and 29 of this Act, and send by certified mail,
26 return receipt requested, a copy of the order to the
27 manufacturer that filed the notice of intention of
28 the proposed action and to the protesting dealer or
29 franchisee.
30 The manufacturer shall have the burden of proof
31 to establish that good cause exists to cancel or
32 terminate, or fail to extend or renew the franchise
33 or selling agreement of a motor vehicle dealer or
34 franchisee, and to change substantially or modify
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1 the sales and service obligations or capital
2 requirements of a motor vehicle dealer as a
3 condition to extending or renewing the existing
4 franchise or selling agreement. The determination
5 whether good cause exists to cancel, terminate, or
6 refuse to renew or extend the franchise or selling
7 agreement, or to change or modify the obligations of
8 the dealer as a condition to offer renewal,
9 replacement, or succession shall be made by the
10 Board under subsection (d) of Section 12 of this
11 Act.
12 (D) Notwithstanding the terms, conditions, or
13 provisions of a franchise or selling agreement, the
14 following shall not constitute good cause for
15 cancelling or terminating or failing to extend or
16 renew the franchise or selling agreement: (i) the
17 change of ownership or executive management of the
18 franchisee's dealership; or (ii) the fact that the
19 franchisee or owner of an interest in the franchise
20 owns, has an investment in, participates in the
21 management of, or holds a license for the sale of
22 the same or any other line make of new motor
23 vehicles.
24 Good cause shall exist to cancel, terminate or
25 fail to offer a renewal or replacement franchise or
26 selling agreement to all franchisees of a line make
27 if the manufacturer permanently discontinues the
28 manufacture or assembly of motor vehicles of such
29 line make.
30 (E) The manufacturer may not cancel or
31 terminate, or fail to extend or renew a franchise or
32 selling agreement or change or modify the
33 obligations of the franchisee as a condition to
34 offering a renewal, replacement, or succeeding
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1 franchise or selling agreement before the hearing
2 process is concluded as prescribed by this Act, and
3 thereafter, if the Board determines that the
4 manufacturer has failed to meet its burden of proof
5 and that good cause does not exist to allow the
6 proposed action; or
7 (7) notwithstanding the terms of any franchise
8 agreement, to fail to indemnify and hold harmless its
9 franchised dealers against any judgment or settlement for
10 damages, including, but not limited to, court costs and
11 reasonable attorneys' fees of the new motor vehicle
12 dealer, arising out of complaints, claims or lawsuits
13 including, but not limited to, strict liability,
14 negligence, misrepresentation, warranty (express or
15 implied), or recision of the sale as defined in Section
16 2-608 of the Uniform Commercial Code, to the extent that
17 the judgment or settlement relates to the alleged
18 defective or negligent manufacture, assembly or design of
19 new motor vehicles, parts or accessories or other
20 functions by the manufacturer, beyond the control of the
21 dealer.
22 (e) It shall be deemed a violation for a manufacturer, a
23 distributor, a wholesaler, a distributor branch or division
24 or officer, agent or other representative thereof:
25 (1) to resort to or use any false or misleading
26 advertisement in connection with his business as such
27 manufacturer, distributor, wholesaler, distributor branch
28 or division or officer, agent or other representative
29 thereof;
30 (2) to offer to sell or lease, or to sell or lease,
31 any new motor vehicle to any motor vehicle dealer at a
32 lower actual price therefor than the actual price offered
33 to any other motor vehicle dealer for the same model
34 vehicle similarly equipped or to utilize any device
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1 including, but not limited to, sales promotion plans or
2 programs which result in such lesser actual price or
3 fail to make available to any motor vehicle dealer any
4 preferential pricing, incentive, rebate, finance rate, or
5 low interest loan program offered to competing motor
6 vehicle dealers in other contiguous states. However, the
7 provisions of this paragraph shall not apply to sales to
8 a motor vehicle dealer for resale to any unit of the
9 United States Government, the State or any of its
10 political subdivisions;
11 (3) to offer to sell or lease, or to sell or lease,
12 any new motor vehicle to any person, except a wholesaler,
13 distributor or manufacturer's employees at a lower actual
14 price therefor than the actual price offered and charged
15 to a motor vehicle dealer for the same model vehicle
16 similarly equipped or to utilize any device which results
17 in such lesser actual price. However, the provisions of
18 this paragraph shall not apply to sales to a motor
19 vehicle dealer for resale to any unit of the United
20 States Government, the State or any of its political
21 subdivisions;
22 (4) to prevent or attempt to prevent by contract or
23 otherwise any motor vehicle dealer or franchisee from
24 changing the executive management control of the motor
25 vehicle dealer or franchisee unless the franchiser,
26 having the burden of proof, proves that such change of
27 executive management will result in executive management
28 control by a person or persons who are not of good moral
29 character or who do not meet the franchiser's existing
30 and, with consideration given to the volume of sales and
31 service of the dealership, uniformly applied minimum
32 business experience standards in the market area. However
33 where the manufacturer rejects a proposed change in
34 executive management control, the manufacturer shall give
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1 written notice of his reasons to the dealer within 60
2 days of notice to the manufacturer by the dealer of the
3 proposed change. If the manufacturer does not send a
4 letter to the franchisee by certified mail, return
5 receipt requested, within 60 days from receipt by the
6 manufacturer of the proposed change, then the change of
7 the executive management control of the franchisee shall
8 be deemed accepted as proposed by the franchisee, and the
9 manufacturer shall give immediate effect to such change;
10 (5) to prevent or attempt to prevent by contract or
11 otherwise any motor vehicle dealer from establishing or
12 changing the capital structure of his dealership or the
13 means by or through which he finances the operation
14 thereof; provided the dealer meets any reasonable capital
15 standards agreed to between the dealer and the
16 manufacturer, distributor or wholesaler, who may require
17 that the sources, method and manner by which the dealer
18 finances or intends to finance its operation, equipment
19 or facilities be fully disclosed;
20 (6) to refuse to give effect to or prevent or
21 attempt to prevent by contract or otherwise any motor
22 vehicle dealer or any officer, partner or stockholder of
23 any motor vehicle dealer from selling or transferring any
24 part of the interest of any of them to any other person
25 or persons or party or parties unless such sale or
26 transfer is to a transferee who would not otherwise
27 qualify for a new motor vehicle dealers license under
28 "The Illinois Vehicle Code" or unless the franchiser,
29 having the burden of proof, proves that such sale or
30 transfer is to a person or party who is not of good moral
31 character or does not meet the franchiser's existing and
32 reasonable capital standards and, with consideration
33 given to the volume of sales and service of the
34 dealership, uniformly applied minimum business experience
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1 standards in the market area. However, nothing herein
2 shall be construed to prevent a franchiser from
3 implementing affirmative action programs providing
4 business opportunities for minorities or from complying
5 with applicable federal, State or local law:
6 (A) If the manufacturer intends to refuse to
7 approve the sale or transfer of all or a part of the
8 interest, then it shall, within 60 days from receipt
9 of the completed application forms generally
10 utilized by a manufacturer to conduct its review and
11 a copy of all agreements regarding the proposed
12 transfer, send a letter by certified mail, return
13 receipt requested, advising the franchisee of any
14 refusal to approve the sale or transfer of all or
15 part of the interest. The notice shall set forth
16 specific criteria used to evaluate the prospective
17 transferee and the grounds for refusing to approve
18 the sale or transfer to that transferee. Within 15
19 days from the franchisee's receipt of the
20 manufacturer's notice, the franchisee may file with
21 the Board a written protest against the proposed
22 action.
23 When a protest has been timely filed, the Board
24 shall enter an order, fixing the date (within 60
25 days of the date of such order), time, and place of
26 a hearing on the protest, required under Sections 12
27 and 29 of this Act, and send by certified mail,
28 return receipt requested, a copy of the order to the
29 manufacturer that filed notice of intention of the
30 proposed action and to the protesting franchisee.
31 The manufacturer shall have the burden of proof
32 to establish that good cause exists to refuse to
33 approve the sale or transfer to the transferee. The
34 determination whether good cause exists to refuse to
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1 approve the sale or transfer shall be made by the
2 Board under subdivisions (6)(B). The manufacturer
3 shall not refuse to approve the sale or transfer by
4 a dealer or an officer, partner, or stockholder of a
5 franchise or any part of the interest to any person
6 or persons before the hearing process is concluded
7 as prescribed by this Act, and thereafter if the
8 Board determines that the manufacturer has failed to
9 meet its burden of proof and that good cause does
10 not exist to refuse to approve the sale or transfer
11 to the transferee.
12 (B) Good cause to refuse to approve such sale
13 or transfer under this Section is established when
14 such sale or transfer is to a transferee who would
15 not otherwise qualify for a new motor vehicle
16 dealers license under "The Illinois Vehicle Code" or
17 such sale or transfer is to a person or party who is
18 not of good moral character or does not meet the
19 franchiser's existing and reasonable capital
20 standards and, with consideration given to the
21 volume of sales and service of the dealership,
22 uniformly applied minimum business experience
23 standards in the market area.
24 (7) to obtain money, goods, services, anything of
25 value, or any other benefit from any other person with
26 whom the motor vehicle dealer does business, on account
27 of or in relation to the transactions between the dealer
28 and the other person as compensation, except for services
29 actually rendered, unless such benefit is promptly
30 accounted for and transmitted to the motor vehicle
31 dealer;
32 (8) to grant an additional franchise in the
33 relevant market area of an existing franchise of the same
34 line make or to relocate an existing motor vehicle
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1 dealership within or into a relevant market area of an
2 existing franchise of the same line make. However, if the
3 manufacturer wishes to grant such an additional franchise
4 to an independent person in a bona fide relationship in
5 which such person is prepared to make a significant
6 investment subject to loss in such a dealership, or if
7 the manufacturer wishes to relocate an existing motor
8 vehicle dealership, then the manufacturer shall send a
9 letter by certified mail, return receipt requested, to
10 each existing dealer or dealers of the same line make
11 whose relevant market area includes the proposed location
12 of the additional or relocated franchise at least 60 days
13 before the manufacturer grants an additional franchise or
14 relocates an existing franchise of the same line make
15 within or into the relevant market area of an existing
16 franchisee of the same line make. Each notice shall set
17 forth the specific grounds for the proposed grant of an
18 additional or relocation of an existing franchise.
19 Unless the parties agree upon the grant or establishment
20 of the additional or relocated franchise within 15 days
21 from the date the notice was received by the existing
22 franchisee of the same line make or any person entitled
23 to receive such notice, the franchisee or other person
24 may file with the Board a written protest against the
25 grant or establishment of the proposed additional or
26 relocated franchise.
27 When a protest has been timely filed, the Board
28 shall enter an order fixing a date (within 60 days of the
29 date of the order), time, and place of a hearing on the
30 protest, required under Sections 12 and 29 of this Act,
31 and send by certified or registered mail, return receipt
32 requested, a copy of the order to the manufacturer that
33 filed the notice of intention to grant or establish the
34 proposed additional or relocated franchise and to the
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1 protesting dealer or dealers of the same line make whose
2 relevant market area includes the proposed location of
3 the additional or relocated franchise.
4 When more than one protest is filed against the
5 grant or establishment of the additional or relocated
6 franchise of the same line make, the Board may
7 consolidate the hearings to expedite disposition of the
8 matter. The manufacturer shall have the burden of proof
9 to establish that good cause exists to allow the grant or
10 establishment of the additional or relocated franchise.
11 The manufacturer may not grant or establish the
12 additional franchise or relocate the existing franchise
13 before the hearing process is concluded as prescribed by
14 this Act, and thereafter if the Board determines that the
15 manufacturer has failed to meet its burden of proof and
16 that good cause does not exist to allow the grant or
17 establishment of the additional franchise or relocation
18 of the existing franchise.
19 The determination whether good cause exists for
20 allowing the grant or establishment of an additional
21 franchise or relocated existing franchise, shall be made
22 by the Board under subsection (c) of Section 12 of this
23 Act. If the manufacturer seeks to enter into a contract,
24 agreement or other arrangement with any person,
25 establishing any additional motor vehicle dealership or
26 other facility, limited to the sale of factory repurchase
27 vehicles or late model vehicles, then the manufacturer
28 shall follow the notice procedures set forth in this
29 Section and the determination whether good cause exists
30 for allowing the proposed agreement shall be made by the
31 Board under subsection (c) of Section 12, with the
32 manufacturer having the burden of proof.
33 A. (Blank).
34 B. For the purposes of this Section,
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1 appointment of a successor motor vehicle dealer at
2 the same location as its predecessor, or within 2
3 miles of such location, or the relocation of an
4 existing dealer or franchise within 2 miles of the
5 relocating dealer's or franchisee's existing
6 location, shall not be construed as a grant,
7 establishment or the entering into of an additional
8 franchise or selling agreement, or a relocation of
9 an existing franchise. The reopening of a motor
10 vehicle dealership that has not been in operation
11 for 18 months or more shall be deemed the grant of
12 an additional franchise or selling agreement.
13 C. This Section does not apply to the
14 relocation of an existing dealership or franchise in
15 a county having a population of more than 300,000
16 persons when the new location is within the dealer's
17 current relevant market area, provided the new
18 location is more than 7 miles from the nearest
19 dealer of the same line make or is further away from
20 the nearest dealer of the same line make. This
21 Section does not apply to the relocation of an
22 existing dealership or franchise in a county having
23 a population of less than 300,000 persons when the
24 new location is within the dealer's current relevant
25 market area, provided the new location is more than
26 12 miles from the nearest dealer of the same line
27 make or is further away from the nearest dealer of
28 the same line make.
29 D. Nothing in this Section shall be construed
30 to prevent a franchiser from implementing
31 affirmative action programs providing business
32 opportunities for minorities or from complying with
33 applicable federal, State or local law;
34 (9) to require a motor vehicle dealer to assent to
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1 a release, assignment, novation, waiver or estoppel which
2 would relieve any person from liability imposed by this
3 Act;
4 (10) to prevent or refuse to give effect to the
5 succession to the ownership or management control of a
6 dealership by any legatee under the will of a dealer or
7 to an heir under the laws of descent and distribution of
8 this State unless the franchisee has designated a
9 successor to the ownership or management control under
10 the succession provisions of the franchise. Unless the
11 franchiser, having the burden of proof, proves that the
12 successor is a person who is not of good moral character
13 or does not meet the franchiser's existing and reasonable
14 capital standards and, with consideration given to the
15 volume of sales and service of the dealership, uniformly
16 applied minimum business experience standards in the
17 market area, any designated successor of a dealer or
18 franchisee may succeed to the ownership or management
19 control of a dealership under the existing franchise if:
20 (i) The designated successor gives the
21 franchiser written notice by certified mail,
22 return receipt requested, of his or her
23 intention to succeed to the ownership of the
24 dealer within 60 days of the dealer's death or
25 incapacity; and
26 (ii) The designated successor agrees to
27 be bound by all the terms and conditions of the
28 existing franchise.
29 Notwithstanding the foregoing, in the event the
30 motor vehicle dealer or franchisee and manufacturer have
31 duly executed an agreement concerning succession rights
32 prior to the dealer's death or incapacitation, the
33 agreement shall be observed.
34 (A) If the franchiser intends to refuse to
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1 honor the successor to the ownership of a deceased
2 or incapacitated dealer or franchisee under an
3 existing franchise agreement, the franchiser shall
4 send a letter by certified mail, return receipt
5 requested, to the designated successor within 60
6 days from receipt of a proposal advising of its
7 intent to refuse to honor the succession and to
8 discontinue the existing franchise agreement. The
9 notice shall set forth the specific grounds for the
10 refusal to honor the succession and discontinue the
11 existing franchise agreement.
12 If notice of refusal is not timely served upon
13 the designated successor, the franchise agreement
14 shall continue in effect subject to termination only
15 as otherwise permitted by paragraph (6) of
16 subsection (d) of Section 4 of this Act.
17 Within 15 days from the date the notice was
18 received by the designated successor or any other
19 person entitled to notice, the designee or other
20 person may file with the Board a written protest
21 against the proposed action.
22 When a protest has been timely filed, the Board
23 shall enter an order, fixing a date (within 60 days
24 of the date of the order), time, and place of a
25 hearing on the protest, required under Sections 12
26 and 29 of this Act, and send by certified mail,
27 return receipt requested, a copy of the order to the
28 franchiser that filed the notice of intention of the
29 proposed action and to the protesting designee or
30 such other person.
31 The manufacturer shall have the burden of proof
32 to establish that good cause exists to refuse to
33 honor the succession and discontinue the existing
34 franchise agreement. The determination whether good
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1 cause exists to refuse to honor the succession shall
2 be made by the Board under subdivision (B) of this
3 paragraph (10). The manufacturer shall not refuse
4 to honor the succession or discontinue the existing
5 franchise agreement before the hearing process is
6 concluded as prescribed by this Act, and thereafter
7 if the Board determines that it has failed to meet
8 its burden of proof and that good cause does not
9 exist to refuse to honor the succession and
10 discontinue the existing franchise agreement.
11 (B) No manufacturer shall impose any
12 conditions upon honoring the succession and
13 continuing the existing franchise agreement with the
14 designated successor other than that the franchisee
15 has designated a successor to the ownership or
16 management control under the succession provisions
17 of the franchise, or that the designated successor
18 is of good moral character or meets the reasonable
19 capital standards and, with consideration given to
20 the volume of sales and service of the dealership,
21 uniformly applied minimum business experience
22 standards in the market area;
23 (11) to prevent or refuse to approve a proposal to
24 establish a successor franchise at a location previously
25 approved by the franchiser when submitted with the
26 voluntary termination by the existing franchisee unless
27 the successor franchisee would not otherwise qualify for
28 a new motor vehicle dealer's license under the Illinois
29 Vehicle Code or unless the franchiser, having the burden
30 of proof, proves that such proposed successor is not of
31 good moral character or does not meet the franchiser's
32 existing and reasonable capital standards and, with
33 consideration given to the volume of sales and service of
34 the dealership, uniformly applied minimum business
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1 experience standards in the market area. However, when
2 such a rejection of a proposal is made, the manufacturer
3 shall give written notice of its reasons to the
4 franchisee within 60 days of receipt by the manufacturer
5 of the proposal. However, nothing herein shall be
6 construed to prevent a franchiser from implementing
7 affirmative action programs providing business
8 opportunities for minorities, or from complying with
9 applicable federal, State or local law;
10 (12) to prevent or refuse to grant a franchise to a
11 person because such person owns, has investment in or
12 participates in the management of or holds a franchise
13 for the sale of another make or line of motor vehicles
14 within 7 miles of the proposed franchise location in a
15 county having a population of more than 300,000 persons,
16 or within 12 miles of the proposed franchise location in
17 a county having a population of less than 300,000
18 persons; or
19 (13) to prevent or attempt to prevent any new motor
20 vehicle dealer from establishing any additional motor
21 vehicle dealership or other facility limited to the sale
22 of factory repurchase vehicles or late model vehicles or
23 otherwise offering for sale factory repurchase vehicles
24 of the same line make at an existing franchise by failing
25 to make available any contract, agreement or other
26 arrangement which is made available or otherwise offered
27 to any person.
28 (f) It is deemed a violation for a manufacturer, a
29 distributor, a wholesale, a distributor branch or division, a
30 factory branch or division, or a wholesale branch or
31 division, or officer, agent, broker, shareholder, except a
32 shareholder of 1% or less of the outstanding shares of any
33 class of securities of a manufacturer, distributor, or
34 wholesaler which is a publicly traded corporation, or other
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1 representative, directly or indirectly, to own or operate a
2 place of business as a motor vehicle franchisee or motor
3 vehicle financing affiliate, except that, this subsection
4 shall not prohibit the ownership or operation of a place of
5 business by a manufacturer, distributor, or wholesaler for a
6 period, not to exceed 18 months, during the transition from
7 one motor vehicle franchisee to another; or the investment in
8 a motor vehicle franchisee by a manufacturer, distributor, or
9 wholesaler if the investment is for the sole purpose of
10 enabling a partner or shareholder in that motor vehicle
11 franchisee to acquire an interest in that motor vehicle
12 franchisee and that partner or shareholder is not otherwise
13 employed by or associated with the manufacturer, distributor,
14 or wholesaler and would not otherwise have the requisite
15 capital investment funds to invest in the motor vehicle
16 franchisee, and has the right to purchase the entire equity
17 interest of the manufacturer, distributor, or wholesaler in
18 the motor vehicle franchisee within a reasonable period of
19 time not to exceed 5 years.
20 (Source: P.A. 89-145, eff. 7-14-95; 90-655, eff. 7-30-98.)